Appendix A
Disclosure for Great American Group, Inc.
I, Mike Crawford , certify that this report reflects my personal beliefs about this company and that no portion of my compensation was, is or will be directly or indirectly related to the specific recommendations or views discussed in this report.
Disclosure
- B. Riley & Co., LLC does and seeks to do business with companies covered in its research reports.
- A portion of this analyst’s compensation is based on the sales, trading and investment banking activities of B. Riley & Co., LLC.
- B. Riley & Co., LLC makes a market in the securities of the company covered in this report.
- Bryant Riley, Chairman of B. Riley & Co., LLC, is a director of this company.
- This company currently is, or within the past 12 months was, a client of B. Riley & Co., LLC. The services provided were Investment Banking Services.
- B. Riley & Co., LLC, or any of its affiliates, has received compensation for investment banking services from this company in the past 12 months.
| Ratings Distribution as of May 17, 2013 | % with Investment Banking Relationships | |||||
| Rating | Number of Companies | Percent of Total | Rating | Number of Companies | Percent of Total | |
| Buy | 120 | 58.8% | Buy | 7 | 100.0% | |
| Neutral | 78 | 38.2% | Neutral | 0 | 0.0% | |
| Sell | 6 | 2.9% | Sell | 0 | 0.0% | |
| Total | 204 | 100% | Total | 7 | 100% | |
Explanation of B. Riley & Co. LLC's Rating System
- Buy: We generally expect "Buy" rated stocks to materially outperform both the S&P 500 and Russell 2000 as well as other stocks in their sector. Further, we believe that the potential reward relative to the potential risk is particularly attractive.
- Neutral: We generally believe "Neutral" rated stocks will perform roughly in line with the S&P 500 and Russell 2000 over the intermediate and long term.
- Sell: We generally expect "Sell" rated stocks to materially underperform both the S&P 500 and Russell 2000 as well as other stocks in their sector. Further, we believe that the potential reward relative to the potential risk is particularly unattractive.
Risks and Considerations
Additional Risks and Considerations
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Cyclicality - Revenue from the company's auction/liquidation business have historically been inversely correlated with US GDP. A cyclical upturn in GDP growth domestically and/or abroad may lead to deterioration in the company's results.
- Inventory/Asset Write-down Risk – Occasionally, the company engages in direct purchases of assets. If the company is unable to sell these assets or is forced to liquidate for less than it paid, the company may incur a loss.
- Guaranteed Arrangements – The company faces risk of loss if the assets liquidated in an auction or retail liquidation are not sufficient to cover the initial guarantee amount.
- Competition – The industry is highly competitive and is characterized by increasing pricing pressure, most notably within the retail liquidation division.
- Dilution – Both the outstanding warrants and the EBITDA earn out targets pose potential dilution risks to the existing shareholder base.